Gas Prices Begin Summer Climb Again

June 10, 2009

Gasoline prices in Chautauqua County continue to creep upward, but Federal Trade Commission officials say prices have not been impacted by retailers acting illegally.

The price of a gallon of unleaded costs Chautauqua County motorists an average of $2.68 as of Tuesday after the price rose more than 6 cents in as many days. Only a month ago, motorists were paying less than $2.30.

The price of gasoline in Western New York is in line with the rest of New York state, though 8 cents above the national average. Discrepancies in gasoline pricing when the price plummeted last October prompted U.S. Rep. Brian Higgins, D-South Buffalo, to rebuke the gasoline retail industry in Western New York and urge FTC officials to investigate the matter.

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In recent days, FTC Chairman Jon Leibowitz dismissed the possibility that gasoline retailers committed a crime when gasoline prices dropped much slower in Western New York than elsewhere across the state and nation last fall.

"After careful and extensive investigation," Leibowitz said in a letter to Higgins, "FTC staff did not find any evidence of illegal activity in gasoline markets in any of the affected cities."

Leibowitz went on to say it is unlikely illegal activity was responsible for the discrepancy in gasoline prices though he admitted that his staff could not determine precisely why that discrepancy existed in the first place.

There are simply too many separate retailers selling gasoline in Western New York with no one coming close to possessing a monopoly over the pumps, and the speed at which the price dropped in October made price coordination between retailers highly unlikely, according to the FTC.

"As wholesale gasoline prices fell substantially on a daily basis, the numerous retail price setters in each affected city would have had to reach agreement on cartel prices on a frequent basis - probably each day if not more frequent," Leibowitz said.

Higgins points to reports that Western New York cities were the most profitable in the nation for gasoline retailers as evidence that prices were higher than they should have been and says he will continue to monitor gasoline prices in Western New York, urging vigilance among motorists.

"While we might not have proof of illegal activity or a clear definition of why our prices were so high, what is clear is retailers were acting in bad faith trough some type of implicit collusion and retailers and consumers should know that we were watching then and are watching now and will continue to work to make sure this doesn't happen again," Higgins said.